Family Formation & Housing

For young couples starting families, buying their first home and/or other real estate. Covers mortgages, credit cards, interest rates, children’s education savings plans, joint accounts for couples and the like.

Are you taking Rate Comparison seriously enough?

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young man showing ignorance on a white backgroundBy Sean Cooper

Special to the Financial Independence Hub

For many Canadians, shopping is a national pastime. Some of our favourite activities include planning a vacation and picking up new furniture – unfortunately, shopping for a mortgage and auto insurance doesn’t seem to be one of them, finds a recent Ipsos survey commissioned by LowestRates.ca.

For most of us, buying a home is the single biggest financial decision of our lifetime. It shouldn’t come as a surprise then that 67% of Canadian mortgage holders consider taking a mortgage a “very important” financial decision. Yet, what comes as a shocker is how little time we’re spending shopping for mortgages. We’re spending an average of 7.75 hours planning a $2,000 vacation, yet we’re only spending 5.75 hours (2 hours less) finding a $300,000 to $500,000 mortgage. I discuss these surprising findings and more in my upcoming book, Burn Your Mortgage.

The survey findings aren’t any different for auto insurance. While 52% of us believe auto insurance is a “very important” financial decision, we’re spending more time picking furniture and choosing a paint colour than auto insurance. Based on these findings, it would seem many of us don’t have our financial priorities straight.

 Take the time to shop for Mortgage and Auto Insurance

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How the smart home can save you money on energy

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Vector concept of smart house or smart home technology system with centralized control of lighting, heating, ventilation and air conditioning, security and video surveillanceBy Dani Nicole

Special to the Financial Independence Hub

You know money doesn’t grow on trees, but did you know your efforts to live a greener lifestyle at home can save you money?

A great way to start is by managing your home’s energy consumption. At Home Improvement Leads, we’re always searching for innovative tech and frugal tips to conserve energy and boost savings. Here are a few of our favourites:

Make Your Home Smarter

We’ve come a long way from the first clunky cell phones. Now, you can control your home’s energy usage from your smartphone. We love innovative tech that makes our home routines more convenient — like smart thermostats. A popular homeowner favorite is the Nest, which actually learns your heating and cooling behaviors and implements an automatic schedule.

frug1You can monitor everything right from your smartphone or tablet, which means you can turn the A/C or heat down when you’re going to be gone for a while, then crank it back up when you’re on your way home.

Smart outlets are great money-savers, too. Plugging appliances and electronics into smart outlets allows you to control everything from an app. Did you leave the iron on at home? No problem. It just takes a few clicks to turn everything off and give you peace of mind. These tech solutions are inexpensive when you think about how much money you can save on your monthly utility bills.

Double Up Your Window Panes

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Affordable Housing: Is it worth it to “Drive until you Qualify”?

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DCIM100MEDIADJI_0412.JPGBy Penelope Graham, Zoocasa

Special to the Financial Independence Hub

It’s an affordable housing conundrum for many downtown city dwellers: is it worth it to trade the convenience of urban living for suburban sprawl? As Toronto real estate prices continue their ascent, the only affordable way to own a detached house seems to be packing up and moving beyond city borders.

Hence the term “drive until you qualify”: the practice of moving far away to a region where real estate is still affordable. Doing so often means assuming a long daily commute to and from a bedroom community to an urban business hub – and the need to drive to the nearest corner store just to pick up some milk.

An Urban Exodus

But logging more time behind the wheel doesn’t seem to be deterring buyers in the GTA; according to recent numbers, they’re heading to the burbs in droves.

Sales are soaring in the municipalities surrounding Toronto – 3,586 houses sold in the 905 region in August, up 24% from the previous year, according to the Toronto Real Estate Board (TREB). Townhouses are also in high demand, with 1,154 units sold. By contrast, a scant 863 houses and 357 townhomes sold within Toronto proper.

Condos were the only housing type that remained stronger in the city than on the outskirts: 1964 compared to 822 in the 905.

But is moving out of the city always an affordable decision for those looking to upgrade their real estate, or accommodate their growing families? There are a number of areas to consider.

You Won’t Escape the Bidding War

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Stop believing real estate has magical investment powers

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Beautiful view of Vancouver, British Columbia, Canada
Expensive Vancouver, BC

By Steve Lowrie, Lowrie Financial

Special to the Financial Independence Hub

If you found yourself on the high seas, and the captain and crew were battening down the hatches, what would you do? Depending on how fast they were scrambling, you might at least make sure your life preserver was within reach.

If the Canadian real estate market were an ocean liner, recent government words and deeds have sent some pretty solid warning shots across the bow – especially for properties in the Greater Toronto and Vancouver regions. Real estate investors who may have forgotten the essential rules of self-preservation would be wise to consider the following:

In a June announcement, Bank of Canada Governor Stephen Poloz warned: “The pace of house price increases in Toronto, and especially Vancouver, is unlikely to be sustained, given the underlying fundamentals.”

Several provincial governments have been looking for ways to manage their real estate markets. For example, this July Globe and Mail article noted that British Columbia was trying to “cool the Vancouver market” by adding a 15 per cent transfer tax on property purchases made by international buyers. Continue Reading…

Make the Family Cottage less Taxing this year

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Cottage On The Carpenter Lake, Canada

By Fraser Willson

Special to the Financial Independence Hub

As the days of summer dwindle to a precious few, the last few weekends at the family seem especially poignant now. And while those thoughts may warm you up a bit, you don’t want to be left out in the cold if you’re not aware of the financial implications when you sell the family retreat or if you transfer ownership to your children this year.

Unlike with your home, transferring ownership of the family cottage to anyone other than your spouse may trigger a taxable capital gain on the appreciation in value during your ownership. You may want to consider leaving the property to your spouse. Doing this helps defer the tax bill until the property is sold or passed on to future generations.

In addition, there are a number of strategies that you can undertake to help reduce and potentially avoid the capital gains tax, including:

Selling and taking back a mortgage

If you decide to sell the cottage to your children, consider taking back a mortgage by offering your children a mortgage loan as payment for the purchase price. The capital gain can be spread over a period of up to five years. And you can forgive the mortgage in your will so your children will own the cottage without debt or paying taxes.

Transferring ownership while you’re alive

Transferring ownership of the cottage to a trust that designates your children as beneficiaries will trigger an immediate capital gain. But from that point on, your heirs are responsible for taxable gains. They won’t pay those taxes until they sell the property or transfer ownership.

Declaring the cottage as your principal residence

You can have only one principal residence for tax purposes. So if your cottage has gone up in value more than your home, consider designating the cottage as your principal residence, which isn’t subject to capital gains tax.

Buying life insurance

Family members can use the tax-free proceeds from a life insurance policy to help pay capital gains taxes on your cottage when you leave it as part of your estate.

If you plan to sell or transfer ownership of your family cottage this year, make sure your finances align with your goals. Doing so can help ensure you stay on track to reach them.

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